Impact Of Goal Setting

Another inspiring story that was delivered to my mailbox. Though the topic is on Impact of Goal Setting, the example given in on the world's greatest investor,Warren Buffet. I guess it would be useful to all investors out there, especially to those who look up to him as the Investment Guru.

In 1952, there was a research study done on the impact of goal setting on the graduating batch of students at Yale University. When asked how many of them had clearly specified and written down goals, only three percent responded. The remaining ninety-seven percent, despite being highly intelligent and hardworking, had no road map where they would be five to ten years after graduation. Twenty years later in 1972, a follow up study was done on the class of 1952. What they discovered was shocking; the combined income of the three percent who had clear goals was greater than the entire income of the ninety seven percent combined! Was it just a coincidence or does having clear goals really have an impact on a person’s personal and financial success?

One classic example is investor Warren Buffet. Does his ability to come about by chance? Absolutely not. From a very early age young Buffett was obsessed with making money and had a very clear dream of becoming the world’s greatest investor. Born during the depression when his father was close to bankruptcy, Warren learnt about the value of money and the importance of being financially secure at an early age.

Even before his teens, Warren knew that he wanted to be rich. As early as elementary school and later on in high school, he would tell his classmates that he wanted to become a millionaire before the age of 35 (when he turned 35, his net worth exceeded $6 million). It was because of his goal that he constantly thought of ways to make money, while most other kids his age would be spending their parents’ money.

He even memorized a book called ‘ A Thousand Ways to Make $1,000’. At the age of six, he started buying coke bottles at 25-cents per six-pack and selling them at 5-cents a bottle, giving him a 16% gross profit, as he would tell himself. At the age of 13, he got a job delivering newspapers and through innovative marketing and distribution strategies, he served five hundred customers a day. At the age of 11, he took all his savings and started investing in the stock market. His first investment was three shares in a company called ‘City Service’. While most kids his age were reading comic books, Warren spent his time reading company annual reports.

By the age of 14, he started a pinball business and was earning $175 a week, as much as the average 25-year old was earning in 1944. Would he have taken all those actions if he never set a goal to be rich in the first place? Of course not. It was clearly because of his focus of energy and actions that allowed him to become the best in what he does.